Bribery Act Review – Facilitation payments still problematic

Last week, the Department for Business, Innovation and Skills (BIS) sent letters to industry leaders, inviting them to comment on whether the Bribery Act has had an impact on their attempts to export. They also asked if guidance issued to help business avoid problems under the Act is useful and for suggestions to clarify the information. According to The Independent newspaper, BIS officials have said that the guidance that accompanies the Act, rather than the law itself was the main focus.

Ambiguity

Common complaints that were heard before the Bribery Act came into force are rearing their head again – particularly with regard to facilitation payments and corporate hospitality. Opponents have indicated that there is too much ambiguity about what constitutes improper hospitality and also point out that the US allows payments to secure the performance of non-discretionary ‘routine government action’.

Corporate risk

However, care must be taken for any company about facilitation payment. As pointed out in Bribery: A compliance handbook, for companies, combating bribery is now a corporate risk issue and needs to be embedded in the culture of the firm. So for companies, ambivalence on facilitation payments leads to a mixed message to employees and confusion over sanctions. Any move to reverse their illegality may, ironically, make it more difficult for the company to oversee what is actually going on.

When does a facilitation payment become a bribe?

Wrongdoing often thrives in that sort of ambiguity. At what point does a facilitation payment become a bribe? In some African countries, 5 US$ could be a day’s wages – but no doubt most UK companies would regard 50 US$ as a ‘small’ payment – and make no mistake these small payments can add up. Some of the US cases suggested that companies ended up paying over 40,000 US$ in one year on ‘facilitation payments’.

Clearer guidance on when to prosecute needed

However, the review instituted by BIS could provide welcome guidance to the Serious Fraud Office (SFO) as to when to prosecute. Although this is arguably dealt with in the Code for Crown Prosecutors, it would surely be welcomed if the guidance was clear as to when to prosecute. For example, genuinely isolated cases should not be prosecuted – but systematic payments might not be tolerated.

Advice for businesses

Companies should be aware of the issues highlighted in Chapter 5 of the Handbook (Small Bribes and Facilitation payments) and as always ensure that adequate procedures (chapter 8) are in place.

Raj Chada is joint author of Bribery: A compliance handbook (Bloomsbury Professional 2014)

This blog first appeared on Bloomsburylawonline.com.